Press Release

Obama’s “Free College” Plan Leaves Taxpayers with the Bill

(Washington, D.C.) – Following the recent State of the Union address, the American Action Forum (AAF) presented an analysis of how much President Obama’s $60 billion “free community college” initiative would cost each state. According to AAF, spending in each state would have to increase anywhere from 5 to 13 percent in order to meet the contribution to be eligible to receive federal matching funds. This increased spending translates to a total of around $3.7 to $4.1 billion for all states combined. Additionally, it is important to note that this proposal is not free; rather, taxpayers would ultimately bear the cost of both the federal and the state portions of the program. Federal tax hikes in recent years include levies on tobacco, health insurance, Medicare, medical devices, among others.

Daniel Garza, Executive Director of The LIBRE Initiative, released the following statement:

“It’s naïve to think government-paid college will fix the problem with the rising cost of tuition in the country. It has already been shown that for every new dollar a college receives in subsidized federal loans, a school raises its price by 65 cents, and for every dollar the school receives in Pell Grants, a college raises tuition by 55 cents. Everyone would love for college to be ‘free,’ but the reality is that government funding artificially inflates the demand for higher education, and consequently is a major contributor to the inflated cost of higher education.

What we need is a new approach - one that focuses on those who most need assistance, and structured in a way that does not raise costs for others. President Obama’s federal takeover of student loans - enacted 5 years ago - clearly is not helping, as the average cost for tuition, room and board at four-year colleges and universities has increased by 28 percent during his administration. Calling it “free college” is not only misleading, it is flat-out pandering to the a younger generation that will ultimately end up shouldering the costs of the long-term consequences of rising costs in education. Young, working Latinos would be among those who bear the cost of the growing burden of taxes and debt. If the president wants to make a difference in higher-education, we need a more innovative, cost-effective, or responsible approach.”